Posted on: August 06, 2014

Author: ATB Business & Agriculture

Launching a business is no easy feat—even for the most experienced of entrepreneurs—and opening a retail store can be especially risky due to high startup costs and increasing local competition. With this in mind, it’s important for business owners to consider a wide variety of factors that may affect the profitability and, ultimately, success of their venture.

Here are five crucial considerations to make when opening a storefront business:

Location

The phrase ‘location, location, location’ holds especially true when it comes to opening a brick-and-mortar store. Choosing a location for your storefront is arguably one of the most important decisions you will make while trying to get your business off the ground, therefore it’s important that you take your time and do your due diligence in making a decision.

Your storefront must be located in a neighbourhood or area that your target customers regularly visit—for example, a coffee shop would likely be successful in an area popular with young professionals. While a great location for your business won’t necessarily guarantee success, a bad location could mean failure. Before deciding upon a spot, ask the following questions:

Is the area safe?

Is the building secure?

Is it accessible by public transport?

Is there adequate parking?

Signage & Exterior

If potential customers don’t notice a store or can’t find it, the business will struggle. Therefore, signage is one of the most important tools retailers have at their disposal to attract customers.

Eye-catching and unique signs can help businesses stand out from the crowd, and well-dressed window displays allow consumers to look in and see what products are on offer. The goal is simple: you want to create visually attractive displays to entice potential customers to walk in to your store.

Layout & Interior

First impressions count for everything, which means that the visual setting of your store sets the tone for your customer’s experience with you. You can use colour, texture and layout to convey your business’s philosophy, so take some time to consider what message you want to get across to your customers.

Before making any decisions on the interior of your store, get out there and do some research on other retail businesses. Take notes on what you like and don’t like about their stores (what works and what doesn’t), and then figure out why you liked certain elements and disliked others.

But don’t just design the interior of your store with aesthetics in mind—you also have to consider the merchandising of your products. The more products your customers see the more they are likely to buy, so place items strategically around your store giving your most profitable items the best spots where customer traffic is high.

Neighbouring Businesses

Neighbouring businesses can have a big impact on the success of your store, and depending on the nature of the products and services they offer, they could end up being a strategic partner—or competitor—to your company. If two businesses close to one another sell the same products, the one that sells them cheaper is likely to get more business. Alternatively, a gift shop and a greeting card store in close proximity could complement each other and direct additional traffic to one another.

Staff

Often customers form impressions of a store based on its sales force—after all, they act as the face of your company. Therefore, it’s important to ensure that your staff are able to effectively represent your brand, keep customers satisfied, and encourage repeat business. Where possible, try to hire experienced staff with a knowledge of the products you’re selling. Otherwise, be sure to hire problem-solvers with a willingness to listen and learn.

Bonus: Affordability

Once you’ve found a potential location for your store, ask yourself: is the rent affordable? Before signing a lease, be sure to sit down with your accountant to see if you can afford the rent. Calculate your break-even sales and work out how much you need to spend on renovating the premises. Discuss your requirements with your bank to see if there’s an opportunity to finance some of the capital expenditure (if required).